"what estimate he has made of the annual value of new mortgages that Northern Rock will need to originate in order to prevent a non-asset covenant breach occurring of the Granite securitisation vehicles."

To which Angela Eagle (Parliamentary Secretary, HM Treasury) gave the very , very carefuly worded reply, "The sale of mortgages from Northern Rock into Granite is a commercial decision for Northern Rock. The estimated value of mortgages that Northern Rock would need to sell into Granite in order to avoid a non-asset trigger is a commercially sensitive matter."

"Northern Rock’s management, led by Ron Sandler, is expected to shrink the lender’s balance sheet, allowing it to repay the government debt within two to three years. The Treasury stressed that the £14bn figure was a forecast and could change in the future."

This suggests that the mortgage book will be rduced by about £10-11 Bn. This will be done by telling mortgage holders when their term expires that rates will rise - effectively they don't want their business - a polite financial Fuck Off - take your business somewhere else.

Now some 80% (ish) of mortgagees are responsible people, they have a very sizeable chunk of their earnings tied up in the house they live in or rent out. They willsimply move an and their solid credit history of unbroken payments will move onto the books of another bank - B & B, A & L, HBOS etc., who will not charge usorious rates.

BOE / NR will then be left with those mortgage holders with a rotten payments history , strewn with "payments holidays" bounced cheques, failed Direct debits - at the bottom end of what we bankers like to call "credit quality".

Unsurprisingly these will include many , many of those "lie to buy" mortgages where people self declared ... they will include the funny money 125% mortgages ... many if not most will have no equity and by walking away will look on their mortgage payments as an alternative way of having paid rent.

Of course it will affect their credit status...but that was bogus anyway so what have they to lose?

This will have several effects.

1. Family problems , splits, divorces, broken homes.2. Boost to rental property.3. Intense pressure on public housing and social servcies.4. Huge increase in foreclosures (especially in Labour held NE seats) which will help drive market prices down.5. Which Lowers the asset value of the mortage held by the Bank of England / Northern Wreck / Newcastle United.6. Mr Branson was right, NR is a broken Brand and with unrealistic mortgage rates cannot generate enough new business to "in order to prevent a non-asset covenant breach occurring of the Granite securitisation vehicles"7. Which will lead to a " a non-asset covenant breach occurring of the Granite securitisation vehicles"8. Which will cause what Angela Eagle and the authors of the Granite prospectus ***calls a "non-asset trigger " - about which she is coy as it is "a commercially sensitive matter".

Too fucking right it is, because if that happens, Granite want to return the Assets (?) and say, "Please may we have our money back" ... and there is £40 Bn. of Granite Bonds that can be "triggered".

Or in more technical terms this would (what we bankers call) breach "triggers" ,the trust will be wound down and go into early amortisation. (We want our money back) Many of the triggers are related to the credit quality of the mortgage book – if mortgage arrears were to increase dramatically, for example, this would trigger a wind down.... .oooooh ...er.

Looks like Gordon "Prudence " Brown and Alistair "Stability" Darling are on to a winner there then.

We'll pass that one by for you again ...

"Northern Rock’s management, led by Ron Sandler, is expected to shrink the lender’s balance sheet, allowing it to repay the government debt within two to three years. The Treasury stressed that the £14bn figure was a forecast and could change in the future."

Could change in the future! You can put your fucking mortgage on it.

NEXT WEEK - Star attraction Montigue Tigg is joined by Alastair Darling to launch the Anglo-Bengalee Disinterested Loan and Life Assurance Company along with Jonas Chuzzlewit and Mr Pecksniff.